"DAILY UNION," WASHINGTON CITY. MAY 25, 1849. "Statement furnished by Jefferson Davis, Esq., Senator of the United States.

"The State of Mississippi has no other question with bondholders than that of debt or no debt. When the United States Bank of Pennsylvania purchased what are known as the Union Bank bonds, it was within the power of any stock-dealer to learn that they had been issued in disregard of the constitution of the State whose faith they assumed to pledge. By the constitution and laws of Mississippi, any creditor of the State may bring suit against the State, and test his claim, as against an individual. To this the bondholders have been invited; but conscious that they have no valid claim, have not sought their remedy. Relying upon empty (because false) denunciation, they have made it a point of honour to show what can be shown by judicial investigation; i.e., that there being no debt, there has been no default. The crocodile tears which have been shed over ruined creditors, are on a par with the baseless denunciations which have been heaped upon the State. Those bonds were purchased by a bank then tottering to its fall-purchased in violation of the charter of the bank, or fraudulently, by concealing the transaction under the name of an individual, as may best suit those concerned-purchased in violation of the terms of the law under which the bonds were issued, and in disregard of the constitution of Mississippi, of which the law was an infraction. To sustain the credit of that ricketty bank, the bonds were hypothecated abroad for interest on loans which could not be met as they became due.

"A smaller amount is due for what are termed Planters' Bank bonds of Mississippi. These evidences of debt, as well as the coupons issued to cover accruing interest, are receivable for State lands; and no one has a right to assume they will not be provided for otherwise, by or before the date at which the whole debt becomes due.

"JEFFERSON DAVIS."

To this letter the London "Times," in its money article, of the 13th July, 1849, replied as follows:

"The case of Mississippi stands thus: In 1838 "the State issued bonds for five millions of dollars, to "establish the Union bank. These bonds were dated "June, 1888, bearing five per cent. interest from date, "and it was stipulated with the bank that they should "not be sold under their par value. On the 18th "August following, the bank sold all these bonds to "the United States Bank for five millions of dollars, "payable in five equal instalments in November, "January, March, May, and July, but without in"terest. The money was punctually paid to the Mis"sissippi Bank, and the Legislature of Mississippi, "on the terms of the sale being communicated to 66 them," resolved, 'That the sale of the bonds was "highly advantageous to the State, and in accordance "with the injunctions of the charter, reflecting the "highest credit on the Commissioners, and bringing

timely aid to an embarrassed community?' In "little more than two years, however, the Mis"sissippi bank became totally insolvent, having lost "the entire five millions invested in it by the State. "Immediately on this having transpired, the Gover"nor of the State sent a message to the Legislature "recommending them to repudiate, (this was the "first time the word was used) their obligations, being "founded on the plea, that as the bonds were issued "with interest payable from the date, and they had "been sold to the United States Bank for their nomi"nal amount only, the stipulation that they should 66 not be disposed of below their par value, had been "departed from. He further urged that although "the bonds had been sold ostensibly to Mr. Biddle,

"the President of the United States Bank, the sale 66 was actually to the bank itself, which, by its charter "could not legally purchase them. Hence although "Mississippi had received the money for the bonds, "it was thus proposed to refuse to repay it, on the "ground that the purchaser had no right to buy "them. The Legislature however, was not quite pre"pared for this, and accordingly in responding to the "Governor's message, they resolved. 1st. That the "State of Mississippi is bound to the holders of the "bonds of the State sold on account of the bank for "the amount of principal and interest. 2nd. That the "State of Mississippi will pay her bonds, and preserve "her faith inviolate. 3rd. That the insinuation that "the State of Mississippi would repudiate her bonds "and violate her plighted faith, is a calumny upon "the justice, honour and dignity of the State.' But "after this, the pecuniary condition of the State be"came rapidly worse, and the disposition to pay "diminished in proportion. Accordingly a joint com"mittee of the Legislature appointed in 1842, re66 ported that the State was not bound to pay the "bonds, advancing the reasons before mentioned, and "also another, namely, that the bonds had not been "sanctioned in the manner required by the constitu❝tion, since although the provision that no loan should "be raised, unless sanctioned by a law passed through "two successive Legislatures had been complied with, "and the bonds had been legally authorized, the act "also prescribed certain conditions regarding the "Bank of Mississippi, which conditions had been "altered by a subsequent act, that had only passed "through one Legislature.

"In addition to the five millions thus repudiated, "Mississippi owes two millions which she recognizes. "It has always, however, been a difference without "distinction, since she pays no dividends on either. "From the period of repudiation up to the present "moment, all representations of the bondholders have "been treated with disregard. About a year and a"half back, however, one of the citizens of Mississippi, 66 a Mr. Robbins, admitted the moral liability of the State, and proposed that the people should dis"charge it by voluntary contributions.

"The next step is the appearance of the letter from "Mr. Jefferson Davis, with whom we are now called 66 upon to deal. This statement which was trans"mitted by him to the Washington' Union, in reply "to our remarks of the 23rd February last runs as "follows:-(Here the Times inserts Mr. Jefferson Davis repudiation letter before quoted.)

"The assurance in this statement that the Planters' "bank, or non-repudiated bonds are receivable for "State lands, requires this addition, which Mr. Jef"ferson Davis has omitted, that they are only so "receivable upon lands being taken at three times its "current value. The affirmation afterwards, that no "one has a right to assume that these bonds will not "be fully provided for before the date at which the "principal falls due, is simply to be met by the fact "that portions of them fell due in 1841 and 1846, "and that on these, as well as on all the rest, both principal and interest remain wholly unpaid.

"Regarding the first part of the statement no "comment could be made which would not weaken its "effect. Taking its principle and its tone together, it

" is a doctrine which has never been paralleled. Let it "circulate throughout Europe, that a member of the "United States Senate in 1849, has openly proclaimed "that at a recent period the Governor and Legisla"tive Assemblies of his own State deliberately issued "fraudulent bonds for five millions of dollars to 'sus"tain the credit of a rickety bank;' that the bonds "in question, having been hypothecated abroad to in"nocent holders, such holders have not only no claim 66 against the community by whose executive and re"presentatives this act was committed, but that they "are to be taunted for appealing to the verdict of the "civilized world, rather than to the judgment of the "legal officers of the State by whose functionaries 66 they have been already robbed; and that the ruin "of toil-worn men, of women, of widows, and of chil"dren, and the 'crocodile tears' which that ruin has “occasioned, is a subject of jest on the part of those

by whom it has been accomplished, and then let it "be asked if any foreigner ever penned a libel on "the American character equal to that against the "people of Mississippi by their own Senator."

To this reply of the London "Times," which, (except in portions of Mississippi,) was generally approved throughout the Union, Mr. Jefferson Davis responded in a very long letter, dated from his residence, Brierfield, Mississippi, Aug. 29, 1849, addressed to the Editors of the "Mississippian." He begins as follows:-"The London Times of July 13, 1849, contains an article which most unjustly and unfairly attacks the State of Mississippi and myself because of a statement I made in refutation